Bank mulls RKO Keiths’ note sale – QNS.com

Bank mulls RKO Keiths’ note sale

Doral Bank, which owns the $20 million mortgage on the neglected RKO Keith’s theatre in Flushing, is in conversations to get out from under the loan. Photo by Christina Santucci.
By Connor Adams Sheets

The bank that holds the mortgage on the RKO Keith’s theatre is in negotiations to sell the $20 million note it owns on the Flushing property, a representative of the bank said Tuesday.

Kenneth DiGregorio, senior vice president of Doral Bank, which lent the developer Boymelgreen Development the money to purchase the building, confirmed that it is looking into selling the note, but declined to say who the potential buyer is.

“We’re in negotiations with a potential buyer for the note on the property itself,” he said. “If somebody wants to replace us as a lender, they buy the note and then negotiate with the owner of the building for sale of the property, or the worst case scenario is if there was a foreclosure, they would be the ones who would foreclose on the property.”

He said the deal was not final and he could not estimate when it might be completed. The parties were also still negotiating a price for the note, he said.

“We’re not out of it, it’s a negotiation,” he said. “Serious negotiation, yes, with someone who’s very interested, but there’s no time frame on it.”

Boymelgreen has attempted to develop the long-neglected site, at 137-25 Northern Blvd., and plans were approved to turn the theatre into a 17-story condo tower with a senior center in 2005.

The plans called for the construction of 200 apartments building at the foot of Main Street, 229 parking spaces, a senior center and the restoration of the  landmarked lobby to preserve the theatre’s history, but they were stalled when Boymelgreen said the project would not be financially viable if certain changes were not made.

Boymelgreen put the project up for sale in 2007 for $24 million, but has been unable to find a buyer at that price level.

DiGregorio said Doral Bank is looking to possibly sell the note because “the loan is not being serviced right now.”

Rick Gallo, co-organizer Save the RKO Keith’s Flushing, a Facebook group with more than 2,200 members, said he was concerned about the building’s future.

If the building is sold, Gallo, who grew up less than eight blocks from the theatre during its heyday, said he worries that the facility will be converted into condominiums or razed, and he would rather see it be turned into a performing arts center or used for charitable events.

“I want to be sure that if it is going to be sold, it’s going to be sold to the right people and that they are going to take care of it,” he said. “I did go there when I was younger. I saw ‘Star Wars’ and ‘Back to the Future’ there, ‘Splash’, all the old classics, and we snuck into ‘Rambo.’ It was such a beautiful theatre, and so much could be done with it.”

He is also one of the leaders of the Friends of RKO Keith’s in Flushing, a nonprofit corporation, whose members are raising funds to commission a feasibility study to determine what ways the theatre could be used to benefit the community.

Reach reporter Connor Adams Sheets by e-mail at csheets@cnglocal.com or by phone at 718-229-0300, Ext. 138.

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